- Circle’s USDC stablecoin is now trading around its $1 peg once again after losing its peg to the dollar over the past few days.
- The company’s CEO, Jeremy Allaire, assures users that Circle’s reserves are safe and operations will resume when US banks open today.
USDC Regains Its Dollar Peg
USDC, the stablecoin issued by Circle, lost its peg against the US Dollars last week. The de-pegging occurred following reports that revealed Circle’s exposure to the now-collapsed Silicon Valley Bank.
The company was said to have held $3.3 billion of its assets in the bank, and its collapse last week led to concerns within the cryptocurrency community. This saw its stablecoin, the USDC, lose its peg and trade below $1.
However, USDC is now trading around the $1 mark once again following some encouraging developments.
Circle’s CEO, Jeremy Allaire, assured users that the company’s reserves are safe and secure. Furthermore, he revealed that liquidity operations would resume when U.S. banks open Monday.
Circle’s USDC operations will open for business on Monday morning, including with new automated settlement via our new partnership with Cross River Bank. https://t.co/ybkSEedzrC— Jeremy Allaire (@jerallaire) March 13, 2023
"We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system. 100% of deposits from SVB are secure and will be available at banking open tomorrow. 100% of USDC reserves are also safe and secure, and we will complete our transfer for the remaining SVB cash to BNY Mellon. As previously shared, liquidity operations for USDC will resume at banking open tomorrow morning.”
Circle’s CEO also praised the US government for its $25 billion funding program aimed at supporting liquidity-troubled banks such as SVB.
Signature Bank Joins The List Of Collapsed Banks
Crypto-friendly Signature Bank was closed down by New York banking authorities on Sunday in a move designed to protect the US economy and improve faith in the banking system.
While commenting on this latest development, Allaire said the closure of the Signature Bank means that Circle is no longer able to process USDC minting and redemption through SigNet. As a result, Circle will be temporarily relying on settlements through BNY Mellon.
He revealed that Circle is already working to onboard a new transaction banking partner with automated minting and redemption as soon as possible.
The broader crypto market performed well over the weekend, with Bitcoin finally trading above the $22k level once again.